Origin: buy now or pay more later

NSW fans at Melbourne’s Etihad Stadium for the NSW v Queensland State of Origin match on May 23.
Photo: Sebatian Costanzo

by
Claire Stewart

Rugby league fans who are slow off the mark have had to dig deeper for a ticket to next week’s State of Origin games after the NRL trialled an American ticketing system that raises prices in line with demand.

NRL general manager of commercial and marketing Paul Kind said the need to drive early sales and increase yield for major events led to the introduction of “dynamic ticketing" to encourage a quicker uptake for the Sydney-based Origin games.

Dynamic pricing is hugely popular with sports teams in the United States, where pricing fluctuates daily in the lead-up to a game depending on factors such as weather, the team’s recent history and player line-up.

The concept is relatively new in Australia. The NRL introduced the new flexible ticket pricing for next Wednesday’s second Origin match, to encourage fans to buy tickets early. The game at Sydney’s 80,000-seat ANZ Stadium has almost sold out.

The new system has a multi-step pricing stem triggered when certain capacity targets are filled. For example, a first batch of about 25,000 tickets were sold for the standard price of $145 each. Once that demand was filled, the price for a smaller second batch went up to $155. The price paid for the last tickets is expected to be closer to $170 each.

“We looked for a way to balance maintaining affordability and access to ticketing for those prepared to buy early with ensuring we make money from Origin when we put the ‘house full’ sign up," said Mr Kind.

But flexible ticket pricing won’t work for games where fans aren’t queuing to fill stadiums, meaning it could have limited success for NRL clubs and other sporting codes. It is unlikely to be used for the Origin 3 match played in Brisbane. Demand is already so strong that the game usually fills out in less than an hour.

NRL ticketing partner Ticketek does not yet have software that would allow fluid and rapid price changes, but Mr Kind said it was only part of the reason they chose a more simple approach. “Our consideration was largely capacity," he said.

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The system in place means demand for tickets to the most popular events won’t push prices to stratospheric levels. “You’ve always got to have a feeling on the pricing," Mr Kind said. “We in the sport have always adopted the model where affordability is a consideration and that has probably come at the expense of yield."

Both the NRL and AFL are adamant dynamic pricing will not be used for grand final events because there is no need to drive sales and the leagues need to allow for ticket allocations to club members.

But Mr Kind said clubs are interested in the potential for dynamic pricing, despite the system working best for venues that are expected to reach or come close to capacity.

“Some of our clubs are playing in large stadiums without that demand, although the system could be adopted for traditional rivalry matches such as when Parramatta plays Penrith or when the Roosters play the Rabbitohs," he said,

The AFL is also reviewing its pricing. Membership manager Darren Birch said the reserve seat model that operates across all AFL stadiums already drives yield from the inventory so he is hesitant about the applicability of demand pricing. He said there are concerns that pricing gains where demand exceeds supply could damage the AFL’s brand integrity.

“Should you pay less for one particular game and more for another game because of the strength of the club brand?" he asked. “Or should we as an industry have uniformity?"

This week Mr Birch will travel to the US for a ticket symposium to look at the merits of dynamic and variable pricing. He is not concerned about backlash from fans; almost 650,000 people procure tickets as part of their club membership. Whatever system the sport implements will not devalue those memberships.

Australian Ballet associate executive director Philippe Magid knows the benefit dynamic pricing can bring. The art company recorded an eight per cent increase in ticket revenue after they introduced dynamic pricing to single ticket sales in 2010.

“Before dynamic pricing, our yield per capita went down as demand increased because as you get deeper into the theatre you’re selling cheaper seats. But when we implemented dynamic pricing that was reversed."

He said investment cost was not significant and the system has managed to change consumer behaviour.

“We’re encouraging people to buy earlier," he said. “The pattern we had seen before this was people buying later and later. And that’s not good for our health, mental or financial."